Principles of macroeconomics.

Abstract

Welcome to Principles of Macroeconomics, an OpenStax resource. This textbook has been created with several goals in mind: accessibility, customization, and student engagement—all while encouraging students toward high levels of academic scholarship. Instructors and students alike will find that this textbook offers a strong foundation in macroeconomics in an accessible format. About OpenStax OpenStax is a non-profit organization committed to improving student access to quality learning materials. Our free textbooks go through a rigorous editorial publishing process. Our texts are developed and peer-reviewed by educators to ensure they are readable, accurate, and meet the scope and sequence requirements of today’s college courses. Unlike traditional textbooks, OpenStax resources live online and are owned by the community of educators using them. Through our partnerships with companies and foundations committed to reducing costs for students, OpenStax is working to improve access to higher education for all. OpenStax is an initiative of Rice University and is made possible through the generous support of several philanthropic foundations. About OpenStax’s Resources OpenStax resources provide quality academic instruction. Three key features set our materials apart from others: they can be customized by instructors for each class, they are a "living" resource that grows online through contributions from science educators, and they are available free or for minimal cost. Customization OpenStax learning resources are designed to be customized for each course. Our textbooks provide a solid foundation on which instructors can build, and our resources are conceived and written with flexibility in mind. Instructors can select the sections most relevant to their curricula and create a textbook that speaks directly to the needs of their classes and student body. Teachers are encouraged to expand on existing examples by adding unique context via geographically localized applications and topical connections. Principles of Macroeconomics can be easily customized using our online platform (http://cnx.org/content/col11626/). Simply select the content most relevant to your current semester and create a textbook that speaks directly to the needs of your class. Principles of Macroeconomics is organized as a collection of sections that can be rearranged, modified, and enhanced through localized examples or to incorporate a specific theme of your course. This customization feature will ensure that your textbook truly reflects the goals of your course. Curation To broaden access and encourage community curation, Principles of Macroeconomics is “open source” licensed under a Creative Commons Attribution (CC-BY) license. The economics community is invited to submit examples, emerging research, and other feedback to enhance and strengthen the material and keep it current and relevant for today’s students. Submit your suggestions to info@openstaxcollege.org. Cost Our textbooks are available for free online, and in low-cost print and e-book editions. About Principles of Macroeconomics Principles of Macroeconomics has been developed to meet the scope and sequence of most introductory macroeconomics courses. At the same time, the book includes a number of innovative features designed to enhance student learning. Instructors can also customize the book, adapting it to the approach that works best in their classroom. Coverage and Scope To develop Principles of Macroeconomics, we acquired the rights to Timothy Taylor’s second edition of Principles of Economics and solicited ideas from economics instructors at all levels of higher education, from community colleges to Ph.D.-granting universities. They told us about their courses, students, challenges, resources, and how a textbook can best meet their and their students’ needs. The result is a book that covers the breadth of economics topics and also provides the necessary depth to ensure the course is manageable for instructors and students alike. And to make it more applied, we have incorporated many current topics. We hope students will be interested to know just how far-reaching the recent recession was (and still is). The housing bubble and housing crisis, Zimbabwe’s hyperinflation, global unemployment, and the appointment of the United States’ first female Federal Reserve chair, Janet Yellen, are just a few of the other important topics covered. The pedagogical choices, chapter arrangements, and learning objective fulfillment were developed and vetted with feedback from educators dedicated to the project. They thoroughly read the material and offered critical and detailed commentary. The outcome is a balanced approach to macroeconomics, to both Keynesian and classical views, and to the theory and application of economics concepts. New 2015 data are incorporated for topics, such as the average U.S. household consumption in Chapter 2. Current events are treated in a politically-balanced way as well. The book is organized into seven main parts: What is Economics? The first two chapters introduce students to the study of economics with a focus on making choices in a world of scarce resources. Supply and Demand, Chapters 3 and 4, introduces and explains the first analytical model in economics: supply, demand, and equilibrium, before showing applications in the markets for labor and finance. Elasticity and Price, Chapter 5, introduces and explains elasticity and price, two key concepts in economics. The Macroeconomic Perspective and Goals, Chapters 6 through 10, introduces a number of key concepts in macro: economic growth, unemployment and inflation, and international trade and capital flows. A Framework for Macroeconomic Analysis, Chapters 11 through 13, introduces the principal analytic model in macro, namely the Aggregate Demand/Aggregate Supply Model. The model is then applied to the Keynesian and Neoclassical perspectives. The Expenditure/Output model is fully explained in a stand-alone appendix. Monetary and Fiscal Policy, Chapters 14 through 18, explains the role of money and the banking system, as well as monetary policy and financial regulation. Then the discussion switches to government deficits and fiscal policy. International Economics, Chapters 19 through 21, the final part of the text, introduces the international dimensions of economics, including international trade and protectionism.